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It's a combination of both, but for different reasons. More companies are handing off their email archiving off to a hosted service, just so as not to have to worry about the expertise in-house. Large enterprises, predominantly financial services, are using hosted email archiving services for e-discovery and compliance issues. There are regulations – SEC rule 17-A4 and a bunch of NASD rules, which require financial services companies to keep records for about six years. And for these large companies, there's an enormous amount of email they have to capture and archive, and, now, instant messages, as well. So rather than trying to manage all this email storage in-house, they actually turn it over to a third party, and the hosting provider offsets some of these costs through economies of scale.

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